Springhill Hospitals, Inc., and Infirmary Health System, Inc.
State Health Planning and Development Agency and Surgicare of Mobile, Ltd.
from Montgomery Circuit Court (CV-16-900859)
Hospitals, Inc. ("Springhill"), and Infirmary
Health System, Inc. ("Infirmary")(hereinafter
referred to collectively as "the hospitals"), have
appealed a judgment of the Montgomery Circuit Court affirming
a decision of the Certificate of Need Review Board ("the
CONRB") of the State Health Planning and Development
Agency ("SHPDA") to deny the hospitals'
petition for a declaratory ruling in which they sought to
reverse the determination contained in a letter of
nonreviewability ("LNR") that SHPDA's executive
director had issued to Surgicare of Mobile, Ltd.
the third appeal to this court regarding this litigation. We
summarized much of the relevant background in Springhill
Hospitals, Inc. v. State Health Planning &
Development Agency, 224 So.3d 670, 671-72 (Ala. Civ.
App. 2016), which involved the second appeal to this court:
"Surgicare owns an ambulatory surgery center
('ASC') in Mobile, and each of the
hospitals owns a facility in Mobile that
provides the same services that Surgicare provides at its
ASC. On August 4, 2014, Surgicare filed a request with SHPDA
for an LNR pursuant to Ala. Admin. Code (SHPDA), Rule
410-1-7-.02,  seeking a determination of whether a plan
to expand its ASC was subject to the review of the CONRB.
Providence [Hospital] and Infirmary thereafter submitted
letters to SHPDA opposing Surgicare's request for an LNR.
Springhill instead filed a complaint in the Montgomery
Circuit Court against SHPDA and Surgicare seeking a
declaratory judgment and injunctive relief. In February 2015,
the Montgomery Circuit Court entered an order dismissing
Springhill's complaint, specifically finding that it had
not exhausted its administrative remedies. This court
affirmed the Montgomery Circuit Court's judgment, without
an opinion, on August 21, 2015. Springhill Hosps., Inc.,
d/b/a Springhill Mem'l Hosp. v. Surgicare of Mobile,
Ltd., et al., 217 So.3d 861 (Ala. Civ. App.
"On March 16, 2016, SHPDA's executive director, Alva
Lambert, issued an LNR to Surgicare in which he stated that,
'[a]ccording to the facts that have been provided, a
Certificate of Need would not be required under Alabama law
and the Alabama Certificate of Need Program Rules and
Regulations for the proposed expansion.' On April 6,
2016, the hospitals, pursuant to Ala. Admin. Code (SHPDA),
Rule 410-1-9-.01,  petitioned the CONRB for a declaratory
ruling 'revers[ing] the reviewability determination dated
March 16, 2016, issued by SHPDA's Executive Director
regarding Surgicare's proposed expansion of its ASC.'
"On May 5, 2016, the CONRB issued a declaratory ruling
denying the hospitals' petition. On May 25, 2016, the
hospitals filed a notice of appeal to the Montgomery Circuit
Court in which they indicated that jurisdiction was proper in
that court under §§ 41-22-11 and 41-22-20(a), Ala.
Code 1975. That same day, the hospitals also
filed a notice of appeal to this court in which they
indicated that subject-matter jurisdiction was proper in this
court under § 22-21-275(6), Ala. Code 1975. On September
12, 2016, the appeal to this court was submitted on the
parties' appellate briefs, and, on September 15, 2016, we
issued an order requiring the parties to submit letter briefs
'regarding the issue whether judicial review of the
Certificate of Need Review Board's May 5, 2016, ruling is
proper in this court under § 22-21-275(6), Ala. Code
1975, or is proper in the Circuit Court of Montgomery County
under § 41-22-11(b), Ala. Code 1975.' See C.J.L.
v. M.W.B., 868 So.2d 451, 453 (Ala. Civ. App.
2003)('[A] court's lack of subject-matter
jurisdiction may be raised at any time ... and may even be
raised by a court ex mero motu.').
"1Rule 410-1-7-.02 was amended effective
October 7, 2016, while the appeal was pending before this
court. The parties and the CONRB operated under the version
of this rule in effect before the amendment.
"2The Alabama Secretary of State's
records indicate that SHPDA submitted an amended version of
Rule 410-1-9-.01 in June 2016."
ultimately dismissed the hospitals' second appeal after
concluding that the legislature had not invested this court
with subject-matter jurisdiction to consider direct appeals
of declaratory rulings issued by the CONRB. Id. at
our dismissal of the second appeal, the circuit court ordered
the parties to submit briefs, and it heard oral arguments of
counsel at a hearing in April 2017 regarding the
hospitals' request for judicial review of the CONRB's
denial of their petition for a declaratory ruling. On April
6, 2017, the circuit court entered a judgment affirming the
CONRB's denial of the hospitals' petition for a
declaratory ruling, reasoning, in relevant part:
"SHPDA's final decision denying [the petition] was
rational, reasonably justified[, ] and supported by
substantial evidence of record." The hospitals filed a
timely notice of appeal to this court on May 18, 2017.
See § 41-22-21, Ala. Code 1975 ("An
aggrieved party may obtain a review of any final judgment of
the circuit court under Section 41-22-20[, Ala. Code 1975, ]
by appeal to the appropriate court to which the appeal or
review lies."); § 12-22-2, Ala. Code 1975
("From any final judgment of the circuit court ..., an
appeal lies to the appropriate appellate court."); and
§ 12-3-10, Ala. Code 1975 ("The Court of Civil
Appeals shall have exclusive jurisdiction of ... all appeals
from administrative agencies other than the Alabama Public
"'"[An appellate] court reviews a trial
court's judgment regarding the decision of an
administrative agency 'without any presumption of its
correctness, since [the trial] court was in no better
position to review the [agency's decision] than' this
court. State Health Planning & Res. Dev. Admin. v.
Rivendell of Alabama, Inc., 469 So.2d 613, 614 (Ala.
Civ. App. 1985). Under the Alabama Administrative Procedure
Act ('AAPA'), § 41-22-1 et seq., Ala. Code 1975,
which governs judicial review of agency decisions,
"'"'[e]xcept where judicial review is by
trial de novo, the agency order shall be taken as prima facie
just and reasonable and the court shall not substitute its
judgment for that of the agency as to the weight of the
evidence on questions of fact, except where otherwise
authorized by statute. The court may affirm the agency action
or remand the case to the agency for taking additional
testimony and evidence or for further proceedings. The court
may reverse or modify the decision or grant other appropriate
relief from the agency action, equitable or legal, including
declaratory relief, if the court finds that the agency action
is due to be set aside or modified under standards set forth
in appeal or review statutes applicable to that agency or if
substantial rights of the petitioner have been prejudiced
because the agency action is any one or more of the
" '"'(1) In violation of constitutional or
"'"'(2) In excess of the statutory
authority of the agency;
" '"'(3) In violation of any pertinent
"'"'(4) Made upon unlawful procedure;
"'"'(5) Affected by other error of law;
"'"'(6) Clearly erroneous in view of t he r
e liable, probative, an d substantial evidence on the whole
"'" '(7) Unreasonable, arbitrary, or
capricious, or characterized by an abuse of discretion or a
clearly unwarranted exercise of discretion.'
"'"§ 41-22-20(k), Ala. Code 1975 .... In
reviewing the decision of a state administrative agency,
'[t]he special competence of the agency lends great
weight to its decision, and that decision must be affirmed,
unless it is arbitrary and capricious or not made in
compliance with applicable law.' Alabama Renal Stone
Inst., Inc. v. Alabama Statewide Health Coordinating
Council, 628 So.2d 821, 823 (Ala. Civ. App. 1993) ....
Neither this court nor the trial court may substitute its
judgment for that of the administrative agency. Alabama
Renal Stone Inst., Inc. v. Alabama Statewide Health
Coordinating Council, 628 So.2d 821, 823 (Ala. Civ. App.
1993). 'This holds true even in cases where the testimony
is generalized, the evidence is meager, and reasonable minds
might differ as to the correct result.' Health Care
Auth. of Huntsville v. State Health Planning Agency, 549
So.2d 973, 975 (Ala. Civ. App. 1989)."
"'Colonial Mgmt. Grp. [v. State Health Planning
and Development Agency, 853 So.2d 972, 974-75 (Ala. Civ.
App. 2002)](emphasis omitted).'
"[Alabama Bd. of Exam'rs of Landscape Architects
v.] Bostick, 211 So.3d [816, ] 822-23 [(Ala. Civ. App.
Ex parte Bostick, 211 So.2d 825, 831-32 (Ala. ...